© 2014 by the Ecological Society of America. Vegetation-type conversions between grasslands and shrublands have occurred worldwide in semiarid regions over the last 150 years. Areas once covered by droughtdeciduous shrubs in Southern California (coastal sage scrub) are converting to grasslands dominated by nonnative species. Increasing fire frequency, drought, and nitrogen deposition have all been hypothesized as causes of this conversion, though there is little direct evidence. We constructed rain-out shelters in a coastal sage scrub community following a wildfire, manipulated water and nitrogen input in a split-plot design, and collected annual data on community composition for four years. While shrub cover increased through time in all plots during the postfire succession, both drought and nitrogen significantly slowed recovery. Four years after the fire, average native shrub cover ranged from over 80% in water addition, ambient-nitrogen plots to 20% in water reduction, nitrogen addition plots. Nonnative grass cover was high following the fire and remained high in the water reduction plots through the third spring after the fire, before decreasing in the fourth year of the study. Adding nitrogen decreased the cover of native plants and increased the cover of nonnative grasses, but also increased the growth of one crown-sprouting shrub species. Our results suggest that extreme drought during postfire succession may slow or alter succession, possibly facilitating vegetation-type conversion of coastal sage scrub to grassland. Nitrogen addition slowed succession and, when combined with drought, significantly decreased native cover and increased grass cover. Fire, drought, and atmospheric N deposition are widespread aspects of environmental change that occur simultaneously in this system. Our results imply these drivers of change may reinforce each other, leading to a continued decline of native shrubs and conversion to annual grassland.